The stock is practically at the 44.90 cup-base entry, which it initially cleared Nov. 1 in weak turnover before reversing 6% lower the next day. The drop may have been due to disappointment over a weak fourth-quarter earnings outlook at rival Stratasys (SSYS).

Both companies make computer-controlled machines that produce three-dimensional objects used mainly to prototype parts in the auto, medical and aerospace industries. The machines help to cut costs and save time by eliminating the need for expensive handmade tooling.

The stock soared almost 14% in heavy volume following the announcement, retaking its 50-day line and starting a four-day climb that built the right side of the base. Volume trailed off after the initial spike, but 3D managed to clear its buy point and hit a new high before pulling back.

The stock boasts a best-possible 99 Composite Rating, highest in the Machinery-Material Handling industry group, which was ranked fifth out of 197 Thursday. Meanwhile, 3D's Accumulation-Distribution Rating is B, indicating that the shares are in demand. And its Relative Strength line is at an all-time high, a sign the stock is outperforming the market.

On the downside, 3D's cup base is a third-stage pattern, which is more prone to failure than earlier-stage bases. Also, it's risky to buy any stock during a market correction.

The stock is practically at the 44.90 cup-base entry, which it initially cleared Nov. 1 in weak turnover before reversing 6% lower the next day. The drop may have been due to disappointment over a weak fourth-quarter earnings outlook at rival Stratasys (SSYS).

Both companies make computer-controlled machines that produce three-dimensional objects used mainly to prototype parts in the auto, medical and aerospace industries. The machines help to cut costs and save time by eliminating the need for expensive handmade tooling.

The stock soared almost 14% in heavy volume following the announcement, retaking its 50-day line and starting a four-day climb that built the right side of the base. Volume trailed off after the initial spike, but 3D managed to clear its buy point and hit a new high before pulling back.

The stock boasts a best-possible 99 Composite Rating, highest in the Machinery-Material Handling industry group, which was ranked fifth out of 197 Thursday. Meanwhile, 3D's Accumulation-Distribution Rating is B, indicating that the shares are in demand. And its Relative Strength line is at an all-time high, a sign the stock is outperforming the market.

On the downside, 3D's cup base is a third-stage pattern, which is more prone to failure than earlier-stage bases. Also, it's risky to buy any stock during a market correction.

See Also

Stocks fell Friday following a round of mixed economic data, but capped the month of February with solid gains. The Nasdaq fell 0.5% and the Dow Jones industrial average gave up 0.4%. Meanwhile, the S&P 500 lost 0.3%. According to preliminary data, volume rose on both major exchanges in the ...

The state of the beleaguered 3D printing industry will come into clearer focus when 3D Systems (NYSE:DDD) reports its Q4 earnings before the market open Thursday. The other main competitor in this field, Stratasys (NASDAQ:SSYS), is set to report before the open Monday. On Feb. 2, Stratasys issued ...

02/25/2015 09:26 AM ET

More Stock Spotlight Articles:

Right now, the Stock Spotlight screen is heavy with stocks too extended to buy or too late-stage to provide a fresh buying opportunity. In a way, that's good. Individual investors who bought earlier breakouts are sitting on gains. As long as a stock isn't threatening to cycle back into a loss or ...

Even if you miss a leading stock when it breaks out from a base, it could go on to set up a three-weeks-tight pattern or another secondary buy opportunity. Tight trading action often is a sign of strength.Tableau Software (NYSE:DATA), which gapped up and soared 17% Feb. 5, is extended 6% from a ...

Buoyed by lower fuel costs, airlines have been flying high in recent months. Today we'll take a closer look at some of the top names in the stratosphere. Fuel prices the week of Feb. 13 were down 38% from a year earlier, says the International Air Transport Association. Transportation-Airline ...

Leading stocks can quickly become extended once they take off, but that doesn't mean investors should remove them from their watch lists. The stocks could set up another chance to buy. All stocks need time to digest their gains — in the process, often setting up a new basing pattern. ...

Sometimes, it pays to pay attention to younger stocks that haven't yet made their big moves. The three stocks highlighted in this column today have been public four years or less. Even better, they are near buy points. Pacira Pharmaceuticals (NASDAQ:PCRX) opened higher but reversed to close down ...

Select market data is provided by Interactive Data Corp. Real Time Services. Price and Volume data is delayed 20 minutes unless otherwise noted, is believed accurate but is not warranted or guaranteed by Interactive Data Corp. Real Time Services and is subject to Interactive Data Corp. Real Time Services terms. All times are Eastern United States. *Reflects real-time index prices.